Amcor Reaffirms FY25 Guidance with Strong Q2 Growth and Berry Global Merger

Steady Growth in Challenging Markets

Amcor plc reported a solid set of financial results for the second quarter and first half of fiscal year 2025, underscoring resilience amid mixed market conditions. Net sales for the December 2024 quarter held steady at $3.24 billion, with volumes increasing 2.3% year-over-year, marking the fourth consecutive quarter of sequential volume improvement. This growth was achieved despite ongoing destocking in healthcare and softness in North American beverage demand.

Adjusted EBIT for the quarter rose 5% on a comparable constant currency basis to $363 million, supported by higher volumes and strong cost management. The adjusted EBIT margin expanded by 40 basis points to 11.2%, reflecting operational efficiencies and benefits from restructuring initiatives. Earnings per share (EPS) also grew 5% to 16.1 cents on an adjusted basis.

Segment Performance Highlights

The Flexibles segment saw net sales increase by 1% to $2.51 billion, with volumes up approximately 3%. Despite a 2% price/mix headwind primarily due to lower healthcare volumes, adjusted EBIT grew 4% to $322 million, with margins improving slightly to 12.8%. Growth was broad-based across North America, Europe, and Asia, driven by categories such as meat, dairy, and fresh foods.

Rigid Packaging faced a tougher environment, with net sales down 5% to $730 million, impacted by a 2% unfavorable foreign exchange effect and lower raw material pass-through. Volumes were roughly flat, with softness concentrated in North American beverage markets. Nevertheless, adjusted EBIT increased 10% to $53 million, reflecting cost discipline and margin expansion to 7.3%.

First Half Results and Financial Position

For the first six months of fiscal 2025, Amcor reported net sales of $6.59 billion, slightly below the prior year due to currency headwinds and price/mix pressures. Adjusted EBIT rose 4% to $728 million, with EPS up 5% to 32.2 cents. Free cash flow was a modest outflow of $38 million, in line with expectations, while net debt stood at $6.5 billion, maintaining leverage at 3.3 times EBITDA. The company expects to reduce leverage to 3.0 times or below by fiscal year-end.

Berry Global Merger: A Strategic Leap Forward

Amcor reaffirmed its fiscal 2025 guidance, projecting adjusted EPS between 72 and 76 cents and free cash flow of $900 to $1,000 million. The company also highlighted the strategic merger with Berry Global, expected to close by mid-calendar 2025. This combination aims to create a global packaging leader with accelerated volume-driven growth, enhanced innovation capabilities, and $650 million in identified synergies by year three.

CEO Peter Konieczny emphasized that the merger aligns with Amcor’s strategy to strengthen its market position and sustainability credentials. The combined entity is poised to deliver faster growth, higher margins, and improved shareholder returns, with a commitment to maintaining an investment-grade balance sheet and dividend growth.

Looking Ahead

While Amcor’s results demonstrate operational resilience and strategic progress, the company faces ongoing challenges including healthcare destocking, soft consumer demand in key markets, and currency fluctuations. The successful integration of Berry Global will be critical to unlocking the anticipated value and sustaining momentum. Investors will be watching closely as Amcor navigates these dynamics and executes on its growth ambitions.